Retail Media & Marketplace Tech Unlock Profit Streams for Target

Target Corporation TGT is leveraging its retail media and marketplace technology to unlock high-margin profit streams, even as overall sales face pressure. Its expanding digital ecosystem, anchored by the Roundel retail media network and Target Plus marketplace, is emerging as a key growth driver that strengthens profitability beyond traditional retail operations.

Roundel, Target’s retail media arm, reported mid-teen growth in ad sales in the third quarter of fiscal 2025, underscoring strong demand from brands seeking access to Target’s large, loyalty-driven customer base. Supported by the company’s first-party data ecosystem, particularly Target Circle, Roundel delivers highly targeted, measurable campaigns, offering superior returns compared with conventional media. Retail media contributes higher-margin revenues, helping improve the profit mix.

The Target Plus marketplace complements this growth, with gross merchandise value up nearly 50% year over year in the fiscal third quarter. By onboarding third-party sellers, Target broadens its assortment without holding inventory, while earning commissions and platform fees that enhance margins and reduce capital intensity. Marketplace growth significantly outpaced overall company sales, highlighting the platform’s scalability.

Technology investments further accelerate both platforms. AI-driven tools and data analytics improve ad targeting, campaign performance and seller productivity, while same-day delivery growth of more than 35% boosts traffic and monetization opportunities. Integration across retail media, marketplace, loyalty and fulfillment strengthens Target’s digital ecosystem and long-term earnings potential.

Together, Roundel and Target Plus provide resilient, asset-light profit streams that diversify revenues beyond core merchandise sales. These data-driven businesses position Target for sustainable growth and support long-term shareholder value.

WMT & BBY Boost Digital Innovation as TGT Expands Tech

Walmart Inc. WMT continued to advance its digital initiatives in the third quarter of fiscal 2026, focusing on delivering more personalized, multi-modal and context-aware app experiences. Walmart is increasingly leveraging AI across operations, with more than 40% of new software code now AI-generated or AI-assisted, while also enhancing associate skills through OpenAI certifications and ChatGPT Enterprise access. Additionally, Walmart’s partnership with OpenAI enables customers to purchase products directly via ChatGPT, creating a more seamless, connected shopping experience across channels.

Best Buy Co., Inc. BBY made strides in its digital transformation in third-quarter fiscal 2026 by driving app engagement, expanding personalization and enhancing online experiences, including improved TV shopping and faster delivery options. Best Buy’s growing online marketplace now hosts more than 1,000 sellers with 11X more SKUs, while ongoing improvements in fulfillment efficiency and returns convenience further strengthen the omnichannel experience. These efforts reinforce Best Buy’s position as a tech-focused, omnichannel retail leader.

Target’s Price Performance, Valuation & Estimates

The TGT stock has gained 9.5% in the past three months compared with the industry’s growth of 8.4%.

Target’s forward 12-month price-to-earnings ratio of 13.17 reflects a lower valuation than the industry’s average of 31.17. TGT has a Value Score of C.

The Zacks Consensus Estimate for TGT’s fiscal 2025 earnings implies a year-over-year decline of 17.6%, while the same for fiscal 2026 indicates growth of 5.9%. Earnings estimates for fiscal 2025 and 2026 have been upbound by 1 cent per share and unchanged, respectively, in the past 30 days.

Target currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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